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Reader Comments (16)

Posted: Oct 24th 2010 6:32PM clockwork305 said

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I found that pretty interesting, thanks.

Posted: Oct 25th 2010 2:29AM (Unverified) said

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Nice read.

Posted: Oct 25th 2010 2:30AM (Unverified) said

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I love eve because of this kind of attention to detail. I enjoy the managing of my character and his assets. Thats what makes me a long time eve player.

Posted: Oct 25th 2010 12:24AM (Unverified) said

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It works the other way too. There are ISK sources and sinks, and then there are asset sources and sinks. Asset sources include mining and loot. Asset sinks include production and refining waste, refining tax, and ship destruction. And manufacturing transforms assets from one form into another.

It's not the case that ISK must be stable, but the rate of change of ISK must approximately match the rate of change of assets. If it's easier to produce assets than acquire ISK, then the value of ISK increases (deflation). If it's easier to acquire ISK than produce assets, then the value of ISK decreases (inflation).

On top of this, the rate of gain of wealth (whether ISK or asset) must be considered.

Posted: Oct 25th 2010 2:30AM Brendan Drain said

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This is very true! Most of my article was based on the assumption that the rate of material production is stable, but of course it's affected by patches, expansions and even player politics. For the tech 2 market, the prices are nominally stable due to moon minerals being automatically delivered at a rate of 100 units per hour to mining POS, but they're still influenced by nullsec wars etc.

The tech 1 mineral market has been rock solid for years because it's been pushing against the insurance mineral basket floor price. Since insurance and mineral supplies were rebalanced recently, it's been a bit more chaotic.

Increases in the mean rate of gain of materials have allegedly caused EVE to experience a slight deflation over the years, so there are two sides to this story. A comprehensive study into the inflation debate examining all factors involved would certainly be an interesting read, especially in light of recent changes to material supply chains.
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Posted: Oct 25th 2010 3:20AM (Unverified) said

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I wonder though if bounties and such really are ISK faucets. Because that you have to remember that all players that are in an NPC corp are taxed on their sales and mission rewards. Also the revenue from NPC sell orders has to go somewhere (I doubt they sell at cost).

I would think that gives a healthy amount of ISK to splash around rather than them just coming up with them from thin air.

It would be interesting to get a look at the books for an NPC corp don't you think?

Posted: Oct 25th 2010 3:40AM Brendan Drain said

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NPC corp pilots are taxed a percentage of bounties and mission-rewards, but not market sales. The revenue from NPC sell orders is literally deleted from the game. The transactions are kept in a database so it's definitely possible to estimate how much NPC corps make from sale of goods and that'd be really interesting to see! I'd love to get a look at the NPC corp books too.

I've always thought NPC corps should have some kind of book-balancing thing where their prices change depending on profit and loss, but a system like that probably wouldn't make much of a difference to gameplay and would be very tricky to implement in a sustainable way. Right now I'd guess that some NPC corps (such as the newbie schools) make a general profit from taxes and sale of skillbooks/blueprints since they have no real outgoing costs. Others like the insurance company and CONCORD would make a collossal loss, as they have very little coming in and a massive amount going out.
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Posted: Oct 25th 2010 8:30AM Benicio said

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Very interesting and informative.

Posted: Oct 25th 2010 8:52AM HackJack said

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Interesting this is that REAL LIFE has faucets too... But no sinks! Guess what THAT leads to? :)

Posted: Oct 25th 2010 8:53AM HackJack said

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"Interesting THING* is..."
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Posted: Oct 25th 2010 11:37AM (Unverified) said

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A good conceptual article, if not factually accurate.

ISK faucets don't need to be be literal ISK. The refinables that rogue drones drop on death are most certainly an ISK faucet - whether players choose to sell them for cash, refine them for minerals, or hoard them under the mattress is immaterial; value has been generated from nothing. Officer and faction modules, dropped by high-end NPCs and marketable for great values due to their PvP usefulness, represent a huge source of income for mission runners. ISK faucets don't have to be literal.

Some of the biggest ISK sinks in the game aren't represented or misrepresented. Ship destruction isn't an ISK sink? Value that existed in the game world, paid for in ISK, has disappeared. It doesn't matter how the ship gets replaced, or who provides the replacement. When a Titan is destroyed, the billions of ISK worth of materials and modules made to construct it are wiped from the map. Statistically, a portion of its value will drop as loot and salvage, but what of the rest? Vanished into the ether. Asset loss is certainly an ISK sink. It doesn't have to be literal ISK.

Finally, the majority of the EVE world is owned by player alliances. These alliances pay vast quantities of ISK into the void. A large space-holding alliance can be paying up to 40 million ISK /per day/ per star system held. For the larger coalitions, that's billions of ISK every 24 hours, sent to the NPC governing body - effectively wiped from the game. /That's/ an ISK sink.

Good try, and thanks for bringing this topic some publicity.

Posted: Oct 25th 2010 1:55PM (Unverified) said

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rat drop creates value, yes - but it do'nt create ISK to realize, to trade this value.
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Posted: Oct 25th 2010 2:20PM Brendan Drain said

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I think you've misunderstood what is meant by ISK faucet and sink. It really does refer to the very literal points at which ISK enters and leaves the game.

There's a distinct difference between something that creates or destroys materials/assets and something that creates or destroys ISK itself. It doesn't matter that I can personally sell minerals for ISK, acquiring them doesn't introduce any new ISK into the game itself and so it's not an ISK faucet. Similarly, destruction of assets is not an ISK sink, it's an asset/material sink. It doesn't matter that someone, at some point, might have exchanged ISK with another player for the ship or its components. At the moment a ship is destroyed, no ISK leaves the game.

There's a very good reason why we only refer to literal ISK sinks and faucets. The distinction between an asset faucet/sink and an ISK faucet/sink is important to make because they have opposite effects on currency inflation and buying power. More assets going into the game increases the buying power of ISK when buying assets while more ISK going in decreases it. For those purposes, it's very handy to talk only about direct ISK sinks and faucets, which is why it's the definition that the EVE community, CCP's Economist and the CCP developers use.
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Posted: Oct 25th 2010 3:41PM (Unverified) said

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You're right - I interpreted your point wrong. If speaking specifically about the liquidity supply, there are far fewer sources and sinks than otherwise expected. Sovereignty expenses are still order of magnitude larger than any other sink, I'd expect.

However, liquidity is not the sole inflationary or deflationary pressure. As you point out, asset creation and destruction has an equal and opposite effect on the value of 1 ISK, and that the QEN does not specify the ongoing universal asset state does not imply that it is not equally important, nor that it isn't tracked with great interest internally. When the NC destroys a few trillion worth of tritanium in space over a campaign, that is an immediate and far-reaching pressure on the value of an ISK.
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Posted: Oct 25th 2010 2:46PM DrOoo said

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Since I came back to EVE I've been very interested in the Market and Trading aspects of the game. In my opinion there is nothing quite as polished and immersive as the EVE market if you can put up with the boring part.

It's so awesome to be able to predict behavior in a virtual world and use that knowledge to manipulate the game universe itself.

This information is great since measuring and understanding how ISK is created and destroyed lets you predict trends. For example, if you know that Rat bounty's are a "Faucet" if they give a PvE ship a significant buff you can predict how will that affect the commodities and materials and either sell or buy depending on what you get.

I'm incredibly exited about the upcoming expansion. First because it is going to be my first mayor update since I got into the trading aspect of EVE and because some on the changes will create some very interesting markets, specially since a lot of obsolete ships and mods are going to make a comeback along with a nref to some very popular ships.

For a further article I would love to see a more detailed explanation of how each Sink and Faucet affect the current market.

Posted: Dec 6th 2010 10:27PM yujiayao said

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You can be confident in your purchase as each item comes with a no hassle 30 day return privilege.

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